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Lawmakers to overhaul School Finance Act

The Colorado House Education Committee is scheduled to begin work on April 15 on the first overhaul of the School Finance Act in nearly 20 years.

The state Senate has already taken up Senate Bill 13-213, passing it on a 20-15 party-line vote on April 2. The bill went through 15 hours of committee testimony earlier in March, followed by six hours of debate by the full Senate on March 28.

The new school finance act differs from the current act in more than a dozen ways. That includes how pupil enrollment is calculated, funding for all-day kindergarten and half-day preschool, definitions of at-risk pupils and those enrolled in English Language Learning (ELL) programs, minimum per-pupil funding; changes in the calculation of the state and local shares of total funding, including mill levy overrides; and a review of the funding investment and cost studies every four years.

The last major overhaul of the School Finance Act, which created the current formula, was in 1994.

More than six dozen people signed up to testify on SB 213 during the first of three days of hearings in the Senate Education Committee. The first hearing, on March 19, went until nearly midnight. The committee resumed the hearing twice during the next two days to go through more than two dozen amendments.

Most witnesses spoke in favor of the bill, although some said their support was contingent on passage of at least some of the amendments.

SB 213 co-sponsor Sen. Michael Johnston (D-Denver) said the current school finance system has served the state well, but almost 20 years have passed since its original passage, when school uniforms were a big discussion and few had access to cell phones or the Internet.

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He noted that 30 years ago, schools were financed 70 percent by local taxes and 30 percent by the state; by next year that ratio will be almost perfectly reversed. In addition, the number of at-risk and English Language Learners students has grown substantially.

SB 213, with new resources from a November 2013 ballot initiative, will meet those needs, as well as evaluate the outcomes those investments will produce, he said.

Kandy Steel, assistant superintendent of Adams County 14, told the committee that her district has 6,200 at-risk students, which is 82 percent of their total population, and 3,000 students in their ELL programs.

Affluent districts have said they can't do with less, but "if those districts say they can't do with less, what does that mean for districts that have much less?" Steele said.

Representing one of the smaller districts in the state, Superintendent Scott Mader of South Routt RE-3 said he has 400 students. SB 213 "is the best opportunity in 20 years to do something significant for education," Mader said. "The myth out there is that this bill will only benefit the urban districts," he said.

But "in fact, the 43 top districts it will benefit the most are rural districts." SB 213 is "right on target" for where the money should go, which he said is early childhood education and kindergarten. "You can't have world class education with second-class fundingThe time is now."

Charter school representatives said they were unhappy with the funding formula in SB 213, claiming their funding would be negatively impacted. That led Sen. Scott Renfroe (R-Greeley) to question many public school witnesses about how they would share their funding with those charters. But for the smaller districts, that wasn't an issue, since most said they don't have charter schools in their districts.

Johnston acknowledged that SB 213 still needed major work as the bill headed to the Senate floor. Johnston said he waited 10 days between the committee hearing and the Senate debate to allow senators ample time to review the bill and its many amendments.

During that April 1 debate, Republicans argued against the bill because of its required tax increase and how the funding formula would work.

Some complained about the at-risk and ELL funding; in SB 213 students who qualify under both definitions would be funded for both.

Johnston pointed out that about one-quarter of Colorado students would qualify under that formula. However, some ELL programs run past the end of the traditional school year and that additional funding would cover those programs.

Others said the process was moving too quickly on such substantive legislation.

"None of us disagree about importance of children and educating themIt must be adequately funded [but] our current system of school finance is incredibly complex," said Sen. Mark Scheffel (R-Parker).

"This bill fails in that the reform is not that much reform. This is an area that needs complete overhaul. The bill does not require any real change in what underlies education; it just moves the money around."

Douglas County has some of the most innovative education reforms in the county, argued Sen. Ted Harvey (R-Highlands Ranch), but he said under the bill's innovation grants his district would be eligible for only a fraction of the funding, rather than being eligible for 100 percent of it.

"Why would we reward those who are not leading the way at the expense of those like Douglas County?" he asked.

Johnston also addressed one other issue regarding SB 213: that it would not adequately define base funding.

This issue was raised by plaintiffs in a 2005 lawsuit that was heard in March by the Colorado Supreme Court. A decision is not expected until after the session is over.

One of the central arguments in Lobato v. Colorado et al is that the state has never figured out just how much it costs to educate a child in the public school system.

Johnston said that while base funding was not studied for SB 213, the reviews that will take place every four years under SB 213 should provide better data on any gaps in base funding.

The new school finance act will require at least $1 billion more in taxes. The bill requires voters to approve those taxes, although it doesn't directly ask taxpayers for that approval. That would be handled through a ballot initiative for the November 2013 election.

More than two dozen initiatives were filed last month to handle the additional financing required by the new school finance act, although most came from two groups and varied by how taxes would be raised. Those initiatives are currently under review by the staff of the General Assembly's Legislative Council.

Once the staff has completed its work, the Secretary of State's title board will review the initiatives. If any receive final approval, initiative sponsors will circulate petitions to get the measure(s) onto the November ballot.

School funding for the 2013-14 year will be covered under a separate bill that follows the current funding formula. That bill is scheduled to be introduced next week and heard in the Senate Education Committee on Thursday.

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